SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
December 30, 1997
Date of Report
(Date of Earliest Event Reported)
PRIME COMPANIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-22919 52-2031531
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
155 Montgomery Street
Suite 406
San Francisco, California 94104
(Address of principal executive offices)
415/398-4242
Registrant's telephone number
Corcoran Technologies Corporation
1504 R Street, N.W.
Washington, D.C. 20009
Former name and former address
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Merger (the "Agreement")
between Prime Management, Inc., a California corporation, and the
Registrant, Prime Management, Inc. ("PMI") was merged with and into the
Registrant (hereinafter referred to either the "Registrant" or the
"Company") effected with the State of Delaware on December 30, 1997
(the "Merger"). The Agreement was adopted by the unanimous consent of
the Board of Directors of the Registrant and approved by the unanimous
consent of the shareholders of the Registrant on December 23, 1997.
Prior to the merger, the Registrant had 5,000,000 shares of common
stock outstanding held by Pierce Mill Associates, Inc. Pursuant to the
Agreement, the Registrant redeemed and retired 4,750,000 shares of the
outstanding shares of common stock and issued 2,763,123 new shares of its
common stock, subject to adjustments for fractional and dissenting shares,
to the holders of all the outstanding common stock of PMI on a pro rata
basis resulting in a total of 3,013,123 shares outstanding of the Registrant's
common stock.
As a result of the stock exchange, the former shareholders of PMI hold
91.7% of the outstanding shares of common stock of the Registrant. The
sole source of consideration used by the shareholders of PMI to acquire
their respective interest in the Registrant was the exchange of 100% of the
outstanding common stock of PMI.
The outstanding warrants of PMI and other outstanding rights to
purchase shares of common stock of PMI are adjusted according to the
terms contained in such warrants or other rights for conversion to warrants
or rights to purchase 2,578,541 shares of common stock of the Registrant.
Pursuant to the Agreement, on the effective date of the Merger, the
officers and directors of PMI became the officers and directors of the
Registrant. See "Management" below. The by-laws of PMI were adopted
as the by-laws of the Registrant.
Effective as of the date of the Merger, the Registrant changed its name
to "Prime Companies, Inc."
A copy of the Agreement is filed as an exhibit hereto and is
incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) The following table contains information regarding the shareholdings
of the Registrant's current directors and executive officers and those persons
or entities who beneficially own more than 5% of the Registrant's common
stock:
<TABLE>
<CAPTION>
Amount of Percent
stock Beneficially of
Name Owned (1) Class
<S> <C> <C>
Irving Pfeffer
Chief Executive Officer 2,211,498 (2) 55.6%
Director
155 Montgomery Street
San Francisco, CA 94104
David Lefkowitz
President, Director 535,667 (3) 15.1%
155 Montgomery Street
Suite 406
San Francisco, CA 94104
Marshall Raines 5,000 (4) *
Director
155 Montgomery Street
Suite 406
San Francisco, CA 94104
Nicole B. Mason
Secretary 5,000 (5) *
155 Montgomery Street
Suite 406
San Francisco, CA 94104
David Shaw 1,333,333 (6) 39.8%
120 West 45th Street
New York, New York 10026
Pierce Mill 500,000 (7) 15.3%
Associates, Inc.
1504 R Street, N.W.
Washington, D.C. 20009
All directors and 2,757,165 61.1%
executive officers as
a group (4 persons)
</TABLE>
_______
* Less than 1%
(1) Based upon 3,013,123 outstanding shares of common stock.
(2) The total number of shares beneficially owned includes 711,123
outstanding shares, options to purchase 787,041 shares, immediately
exercisable at an exercise price of $3.00 per share expiring on
December 31, 2000 and 535,000 outstanding shares and options to
purchase 178,334 shares with voting rights but no dispositive power.
(3) The total number of shares beneficially owned includes 8,001 shares
and options to purchase 527,667 shares, immediately exercisable at
an exercise price of $3.00 per share expiring on December 31, 2000.
(4)The total number of shares beneficially owned includes options to
purchase 5,000 shares, immediately exercisable at an exercise price
of $3.00 per share expiring on December 31, 2000.
(5) The total number of shares beneficially owned includes options to
purchase 5,000 shares, immediately exercisable at an exercise price
of $3.00 per share expiring on December 31, 2000.
(6) The total number of shares beneficially owned includes 1,000,000
shares and options to purchase 333,333 shares, immediately
exercisable at an exercise price of $3.00 per share expiring on
December 31, 2000.
(7) The total number of shares owned includes 250,000 shares and
options to purchase 250,000 shares. James M. Cassidy is the
President and sole shareholder of Pierce Mill Associates, Inc.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Agreement was
negotiated at "arms length" between the Registrant and PMI. Prior to the
Merger, no relationship existed between any officer or director of the
Registrant or any officer, director or shareholder of PMI. The former sole
director and shareholder of the Registrant had no direct or indirect interest
in PMI. In evaluating PMI as a candidate for such merger, the Registrant
used criteria such as value of the assets of the Registrant and value of the
assets of PMI, the business operations of PMI, the business potential of
PMI and the benefit to the Registrant of such Merger. The Registrant
determined in good faith that the consideration for the exchange was
reasonable.
(b) The Registrant intends to continue the business operations formerly
conducted by PMI.
BUSINESS
Background. PMI was a transportation company incorporated on
December 29, 1970 in the State of California. The Company has two
wholly-owned subsidiaries, Mid-Cal Express, a truck hauling company of
shipments of general commodities, including temperature-sensitive goods, in
both intrastate and interstate commerce and Mid-Cal Logistics, a freight
brokerage company.
On, December 31, 1996, PMI acquired Mid-Cal Express, Inc., a
dormant trucking company, through a stock and asset purchase. Mid-Cal
Express subsequently acquired an operating trucking company, Countrywide
Truck Services, Inc. through a cash purchase of its assets and assumption of
certain liabilities. The major lessors of trucks and trailers to Countrywide
Truck Services, Inc. sublease the equipment to Mid-Cal Express.
During 1997, Mid-Cal Express rapidly developed as a long-haul
truckload carrier, with a fleet of more than 100 tractors and more than 145
refrigerated trailers. On July 22, 1997, Mid-Cal Logistics was incorporated
in California, as a subsidiary of PMI to operate as a freight broker and
logistics management company. Mid-Cal Logistics has an office in
Maryland.
Mid-Cal Express. Mid-Cal Express was incorporated August 29, 1994
but was inactive until 1996 when it acquired two trailers and initiated
operations on a small scale. In December, 1996, it acquired the operations
and assets of Countrywide Truck Service, Inc., a California corporation and
formerly the wholly owned subsidiary of Countrywide Transport Service,
Inc., an over-the-counter public company. Countrywide Truck Service,
Inc. had been operating for 33 years and, as a result of two major uninsured
losses, was forced into an assignment for benefit of creditors as an
alternative to a bankruptcy filing. Since January 1, 1997, Mid-Cal Express
has combined its operations and management and assumed control of the
acquired business.
Mid-Cal Express is an irregular route, truckload carrier transporting a
range of commodities, including refrigerated food products, manufactured
goods, retail store merchandise, paper products, beverages, paints and
chemicals, between the western and northeastern United States and the
provinces of Ontario and Quebec, Canada. Mid-Cal Express may transport
any type of freight (except certain types of explosives, household goods,
hazardous materials and commodities in bulk) from any point in the
continental United States to any other point in another state or souther
Canadian over any route selected by it.
Mid-Cal Express is establishing itself as a preferred or "core carrier"
for shippers who have time sensitive, high volume or high weight
requirements. Its services include multiple pick-ups and deliveries, pick-ups
within narrow time frames, specialized training of drivers, and other
services tailored to customer needs. Mid-Cal Express utilizes employee
drivers as well as owner/operator (independent contractor) drivers to
increase the size of its fleet.
Mid-Cal Express maintains Qualcomm satellite communication devices
in its truck fleet. This technology serves as an instantaneous and accurate
communication link between the driver and the Company, provides
automatic load tracking and monitors the driver's and tractor's performance.
Shipment information is available to the driver via a computer terminal
within the cab. Comprehensive messages sent by satellite, special delivery
instructions, recommended travel routes, weather reports, and logistics-
directed pick-up and delivery information can be delivered to drivers in
route. In addition, such satellite communications allow the Company to
pinpoint the location of each tractor throughout the United States and
southern Canada. Positions are received from each truck at least every hour
showing latitude and longitude.
Mid-Cal Express currently serves approximately 166 customers which
include over 50 major national companies including Eastman Kodak,
Sherwin Williams, Sunkist Growers, Vertex Systems and National Growers.
Mid-Cal Express offers long-haul trucking of fruits and vegetables from
California to all points in the continental United States and short and
medium haul trucking of dry goods, retail store merchandise, paints,
chemicals, paper goods and frozen items.
Mid-Cal Logistics. Mid-Cal Logistics provides freight hauling broker
services. Logistics companies, like Mid-Cal Logistics, allow a shipper to
place a single call to arrange truckload services anywhere in the United
States and certain areas of Canada, without having to contact numerous
individual carriers who may or may not have a truck available for a
particular shipment to a particular destination.
Mid-Cal Logistics maintains a network of truckload carriers to serve its
customers. Upon receiving a call from a customer, a Mid-Cal Logistics
representative contacts various truckload carriers until locating one that has
the time and the proper equipment to transfer the freight. The representative
will make all of the arrangements to have the freight picked up and
delivered. Mid-Cal Logistics also tracks the vehicles and monitors the
shipment from pickup through delivery enabling customers to contact it
rather than the individual carrier to get information on their shipment. Mid-
Cal Logistic's customers are sent a single invoice for all shipments and
payments for those shipments it arranges, covering the shipping and broker
fees. Mid-Cal Logistics then pays the hired carrier, and retains a portion of
the total fee paid by the customer. Thus, customers avoid having to pay
multiple invoices from carriers and brokers.
Mid-Cal Logistics first attempts to assign its customers' routes to Mid-
Cal Express. This reduces search costs related to finding an appropriate
carrier to serve a customer's needs. Mid-Cal Logistic's customers have
priority access to Mid-Cal Express service, as Mid-Cal Logistics serves as
the primary broker for the trucking subsidiary. Mid-Cal Logistics also
retains a database of carriers to assign to routes in the event Mid-Cal
Express cannot meet the needs of the broker's customer. The needs of the
customer dictate the carrier Mid-Cal Logistics will assign.
EQUIPMENT AND TECHNOLOGY
All of the Company's equipment is utilized by Mid-Cal Express. As of
December 31, 1997, Mid-Cal Express operated approximately 107
company-owned or leased tractors and used 65 owner/operators that
provided one or more pieces of operating equipment. The Company's fleet
consists primarily of 48 foot long and 53 foot long , 102 inch wide, high
cube trailers all 143 of which are refrigerated. The average age of tractors
is less than three years. The current trailer fleet has many units equipped
with roller systems to facilitate cargo loading and unloading. The use of
newer equipment minimizes maintenance costs. The Company adheres to a
comprehensive maintenance program for both tractors and trailers.
Owner/operator tractors are inspected prior to acceptance by the Company
for compliance with operational and safety requirements of the Company
and the Department of Transportation. These tractors are then periodically
inspected, similar to Company-owned tractors, to monitor continued
compliance.
The efficiency and flexibility provided by its fleet configurations permit
the Company to handle both high volume and high weight shipments. Mid-
Cal Express intends to maintain its new and efficient equipment fleet by
following a regimen of tractor replacement on a three year cycle and trailer
replacement on a five to seven year cycle. Mid-Cal Express targets a
trailer/tractor ratio of 1.5 to 1. Management believes that this ratio
promotes efficiency and allows it to serve a large variety of customers'
needs, without significantly changing or modifying equipment. Mid-Cal
Express' fleet configuration also allows the Company to move freight on a
"drop-and-hook" basis, increasing asset utilization and providing better
service to customers.
The Company has invested heavily in modern computer and
communications technology. The modern tractor fleet operated by Mid-Cal
Express (and most of the equipment operated by companies utilized by Mid-
Cal Logistics) utilize onboard computers with satellite communications
capabilities. In the case of the Mid-Cal Express fleet, approximately 50
tractors are equipped with a Qualcomm satellite communications system,
which allows the dispatchers to follow the progress of a vehicle, its speed,
fuel consumption, and most importantly, its adherence to schedule, while
allowing the timely and efficient communication of operating data, such as
pickup and delivery instructions, directions to customer facilities, loading
instructions, routing, fuel, taxes, mileage, payroll, safety, weather
advisories, and traffic and maintenance information. Mid-Cal Express plans
to equip the balance of its tractors with Qualcomm in the next twelve
months. The satellite tracking of the movement of the vehicles, the constant
monitoring of schedule, speed, and fuel consumption, and the availability
of two-way communication has allowed the Company to deliver to its
customers a high level of on-time service.
The Company's central dispatching/customer service unit operates 24
hours a day, 365 days a year. If any problem should develop, managers
and supervisors are either on hand or readily available to the dispatch
center.
Mid-Cal Express utilizes EDI (Electronic Data Interchange) for billing
and order communications with its customers that also use EDI. This system
automates purchasing and billing, enabling time and cost efficiencies to be
realized.
DRIVERS AND EMPLOYEES
As of December 1, 1997, Mid-Cal Express employed 125 personnel of
whom 93 were employee drivers, five in maintenance, two in sales and
marketing, and the remainder in administration and management. Mid-Cal
Express contracted with independent contractors (owner/operators)
throughout the year to provide tractors. None of the Company's employees
is represented by a labor union.
The recruitment, training and retention of qualified drivers is essential
to support the Company's continued growth and to meet the service
requirements of the Company's customers. Drivers are selected in
accordance with Company-specific quality guidelines relating primarily to
safety history, driving experience, road test evaluations and other personal
evaluations, including physical examinations an mandatory drug and alcohol
testing. Drivers are trained in all phases of the Company's policies and
procedures, including customer service requirements, general operations,
fuel conservation and equipment maintenance, operation and safety. Mid-
Cal Express' long-haul drivers typically operate as teams, enabling faster
delivery, greater equipment utilization and more desirable "trip-hours" for
the drivers.
Mid-Cal Express drivers are compensated on the basis of miles driven
and length of haul. Drivers are also compensated for additional flexible
services provided to the Company's customers, as well as through bonuses
for safety, fuel efficiency, mileage and driver recruitment.
INDEPENDENT CONTRACTORS
The independent contractors utilized by the Company are
"owner/operators" who provide their own tractors, thus providing the
Company an alternative method of obtaining additional revenue producing
equipment. During December, 1997, the Company utilized an average of
65 owner/operators. The Company intends to increase its use of such
owner/operators.
Each independent contractor enters into a contract with the Company
pursuant to which it is required to furnish a tractor and a driver or team of
drivers exclusively to transport, load and unload goods carried by the
Company. Owner/operators are paid a fixed level of compensation based
on a fee per mile. Owner/operators are obligated to maintain their own
equipment and pay for their own fuel. The Company provides trailers for
each owner/operator. Since beginning operations in January, 1997, Mid-Cal
Express has utilized the services of owner/operators to handle approximately
40% of its hauling services.
REGULATION
The Company currently has authority to carry freight on an intrastate
basis in 48 states. The Federal Aviation Administration Authorization Act of
1994 (the FAAA Act) amended sections of the Interstate Commerce Act to
prevent states from regulating routes rates or service of motor carriers after
January 1, 1995. The FAAA Act did not address state oversight of motor
carrier safety and financial responsibility or state taxation of transportation.
If a carrier wishes to operate in a state where it did not previously have
intrastate authority, it must, in most cases, still apply for authority.
The Company's motor carrier operations are also subject to federal and
state environmental laws and regulations, including laws and regulations
dealing with the transportation of hazardous materials and other
environmental matters. Specifically, the United States Environmental
Protection Agency ("EPA") requires motor carrier operators to obtain a
Certificate of Registration in order to transport hazardous materials . The
Company has initiated programs to comply with all applicable
environmental regulations. The Company requires each of its drivers to
participate in training regarding the handling of hazardous materials,
including tests given to the drivers after such training to ensure that the
basic skills have been achieved. As part of its safety and risk management
program, the Company periodically performs an internal environmental
review to assist in environmental compliance and avoid environmental risk.
In the event the Company should fail to comply with applicable regulations,
the Company could be subject to substantial fines or penalties and to civil or
criminal liability (which are determined on a case-by-case basis).
The Company believes it is currently in material compliance with
applicable laws and regulations and that the cost of compliance has not
materially affected results of operations.
PROPERTY
The Company maintains its offices at 155 Montgomery Street, Suite
406, San Francisco, California. The Company leases 680 square feet under
a one year lease expiring in November, 1998.
Mid-Cal Express' headquarters are located at 21496 Main Street, Grand
Terrace, California. This property includes 6,200 square feet of office
space and a 2,400 square foot storage facility on 5.31 acres of industrial
zoned land. The Grand Terrace/Colton area of Southern California is a
major transportation center, with easy interstate access and proximity to the
crop harvests of the California agricultural industry. This property is
subject to a two-year lease, ending December 31, 1999. Mid-Cal Express
currently intends to exercise its option to purchase this property for
$550,000 at the end of the lease period. Prior to December 1997, Mid-Cal
Express was headquartered at 325 North Cota Street, Corona, California
91720 on a month to month basis. Mid-Cal Logistics maintains its offices
at 1003 Old Philadelphia Road, Aberdeen, Maryland 21001. These offices
are rented pursuant to a one year lease, ending August 1, 1998, with rental
payments of $250.00 a month for 300 square feet. Mid-Cal Logistics has
an option to renew the lease.
MANAGEMENT
Term of
Name Age Office Title
Irving Pfeffer 73 1970 Chairman
Chief Executive Officer
David Lefkowitz 48 1997 President
Chief Operating Officer
Marshall Raines 71 1998 Director
Nicole Mason, JD 26 Corporate Secretary
Emilio Guglielmelli 41 President, Mid-Cal Express
and Mid-Cal Logistics
David Gosling 48 Vice President Finance,
Mid-Cal Express and
Mid-Cal Logistics
Irving Pfeffer serves as Chief Executive Officer and a director of the
Company. Mr. Pfeffer has practiced law at Pfeffer & Williams P.C.
(formerly law Offices of Irving Pfeffer) since 1975. He specializes
primarily in business litigation and general corporate law and has assisted a
number of "start-up" companies with securities and other business related
legal matters. In the course of his corporate legal work, Mr. Pfeffer has
assisted companies to raise venture capital and develop their business plans.
Mr. Pfeffer holds a Bachelor of Arts degree in Economics and Political
Science from McGill University, Canada (1949); a Doctorate in Economics
from the Wharton School of Business, University of Pennsylvania (1954)
and a law degree from LaSalle Extension University (1974).
David Lefkowitz serves as President, Chief Operating Officer and a
Director of the Company. Mr. Lefkowitz has been Chief Operating Officer
and President since January 1997. Between 1988 and December 1996, Mr.
Lefkowitz owned, operated and worked for Lefkowitz & Company, a
Certified Public Accounting firm, where he specialized in management
consulting of growing companies, preparing such companies for eventual
sale and/or mergers and acquisitions. Mr. Lefkowitz has been a Certified
Public Accountant since 1977 and sold his accounting practice to certified
public accounting firm of Check Tan & Co. in December 1996. Mr.
Lefkowitz earned his BS in Business and Accounting from University of
Central Florida, Orlando, Florida in 1974.
Marshall L. Raines has been a Director of the Company since
January, 1998. Since 1980, Mr. Raines has been a Professor of
Advertising, teaching a number of courses, at San Jose State University. At
San Jose State University, Mr. Raines also coordinates the advertising
degree program, which is the largest such accredited program in northern
California. Mr. Raines has served as a consultant to advertising agencies
and is on the Marketing Advisory Board for the United States Postal
Service, and has published a number of books on the subject of advertising.
He earned a Bachelor or Science degree in Marketing from New York
University in 1949 and a Masters of Business Administration from New
York University in 1953.
Nicole Mason serves as Secretary to the Company. Ms. Mason is
licensed to practice law in California and since July, 1997, has practiced as
a corporate/securities associate at Pfeffer & Williams P.C., San Francisco,
California. From February to June, 1997, Ms. Mason worked as a
litigation associate at McMahon Law Offices in San Jose. From September,
1996 to January, 1997, Ms. Mason provided litigation support services to a
large full service San Francisco law firm and the United States government,
with respect to class action litigation matters. Ms. Mason has worked for
the New York Supreme Court as a judicial clerk (May-June 1995) and at
Lincoln Financial Services in Tacoma, Washington (July-August 1995) as a
securities/investment advisor compliance consultant. Ms. Mason attended
the State University of New York at Albany and graduated with Bachelor of
Arts degree in Political Science and Psychology in 1993. She earned her
law degree at the University of Illinois (Champaign-Urbana) in 1996.
Emilio Guglielmelli has been the President of Mid-Cal Logistics since
its inception in July, 1997. From January, 1997 to December, 1997, Mr.
Guglielmelli was the Executive Vice-President of Marketing and Operations
for Mid-Cal Express. Mr. Guglielmelli became President of Mid-Cal
Express in January, 1998. While serving in these capacities, Mr.
Guglielmelli created strong relationships with customers and developed a
network of contacts throughout the trucking industry, which provided the
foundation for Mid-Cal Logistics. Mr. Guglielmelli has worked in the
trucking transportation industry for 16 years and is knowledgeable in all
aspects of the business. Between 1992 and September 1996, he worked for
D.E.F. Express in the Marketing and Operations department, gaining a
reputation for increasing sales of trucking services.
RISK FACTORS
Financial Results. The Company expects that its financial results for
1997 will reflect revenues of approximately $16,000,000 (unaudited) with a
loss of $1,140,000. The Company believes this loss to be attributable to
start-up cost plus the expansion of its customer base. The Company intends
to curb such losses through direct purchases of rolling stock and acquisition
of compatible operating companies, providing sufficient increased revenues
to generate operating profits. There is no assurance that the Company will
not continue to experience losses from its operations.
Freight Rates. The Registrant maintains freight rates competitive with
the market price for similar types of shipments and distances. However,
lower fuel costs or increased market competition may lead to lower freight
rates. Lower freight rates not offset by lower operating costs or increased
volume would have an adverse impact on the Registrant's operations.
Fuel Costs. The Registrant has little or no control over fuel costs
which comprises a substantial portion of its operating expenses. In addition
to the price of fuel charged by providers, the cost of fuel may increase from
an increase in federal or state taxes imposed on the sale of fuel. Significant
increases in these costs would have an adverse impact on the profitability of
the Registrant.
Competition. The truckload transportation industry is highly
fragmented and includes numerous regional, inter-regional and national
carriers. In addition, the Registrant faces competition from other freight
broker companies as well as railroads and, to a lesser degree, air and sea
transportation companies. Many of these competitors have substantially
greater financial and marketing resources than the Registrant and may be
better able to attract and maintain customers.
Availability of Drivers. The Registrant utilizes the services of
employee drivers and independent contractor (owner/operator drivers).
Competition for employee drivers and independent contractors is intense
within the trucking industry. From time to time, there have been industry-
wide shortages of qualified drivers and independent contractors and there
can be no assurance that the Registrant will not be affected by a shortage of
qualified drivers or independent contractors in the future. Prolonged
difficulty in attracting or retaining qualified drivers or independent
contractors could have a material adverse effect on the Registrant.
Seasonality. A portion of the Registrant's truckload operations are in
the transport of fruits and vegetables from California to intrastate and
interstate destinations. The Registrant experiences the greatest demand for
its services during the summer and fall when there is a demand for transport
of such fruits and vegetables. The Registrant may experience reduced
demand for its services with a corresponding reduction in revenues without
any corresponding reduction in overhead. In addition, the demand for the
Registrant's services may be diminished if the amount of produce required
to be shipped by growers is reduced by inclement weather or other factors.
Capital Requirements. The trucking industry is capital intensive and the
Registrant depends on operating leases and debt financing in order to
expand and maintain a modern operating fleet. If the Registrant were
unable in the future to enter into acceptable operating lease arrangements,
raise additional equity or borrow sufficient funds, when needed, it would be
forced to limit its growth or operate its fleet for longer periods, which could
adversely affect the Registrant. Use of older equipment involves higher
maintenance costs and greater safety precautions. Reduced expansion
efforts could result in costly operating inefficiencies.
Regulation. The Registrant's operations are subject to various federal,
state and local laws, regulations and taxes. For example, federal regulatory
authorities (including the Surface Transportation Board and the Department
of Transportation) have broad authority and power to regulate motor carrier
operations (including equipment specifications and commodities
transported); approve rates, charges and accounting systems; and prescribe
certain safety requirements. Such matters as weight and dimension of
equipment are also subject to federal and state regulation. Although
compliance with these laws and regulations has not had a material effect on
the Registrant's operations or financial condition, there is no assurance that
additions or changes to such current laws or regulations will not have a
material effect on the Registrant.
Potential Liability; Uninsured Losses. The Registrant's business, by its
nature, is subject to risk of liability resulting from the movement of freight.
Furthermore, as the Registrant expands its operation, an additional risk of
liability may occur. Currently, the Registrant carries commercial liability
insurance in amounts believed to be adequate to cover any losses. No
assurance can be given that such insurance coverage will be sufficient to
fully protect the business and assets of the Registrant from all claims or that
the Registrant will be able to obtain additional insurance at commercially
reasonable rates. To the extent losses or claims are beyond the limits or
scope of the Registrant's insurance coverage, the Registrant's business and
assets could be materially adversely affected.
Issuance of Future Shares May Dilute Investors Share Value. The
Certificate of Incorporation of the Registrant authorizes the issuance of a
maximum of 50,000,000 shares of common stock and 10,000,000 shares of
preferred stock. The future issuance of all or part of the remaining
authorized common stock may result in substantial dilution in the percentage
of the Registrant's common stock held by the Registrant's then existing
shareholders. Moreover, any common stock issued in the future may be
valued on an arbitrary basis by the Registrant. The issuance of the
Registrant's shares for future services or acquisitions or other corporate
actions may have the effect of diluting the value of the shares held by
investors, and might have an adverse effect on any trading market, should a
trading market develop for the Registrant's common stock.
Potential Adverse Effects of Authorization of Preferred Stock. The
Registrant may, without further action or vote by shareholders of the
Registrant, designate and issue shares of preferred stock. The terms of any
series of preferred stock, which may include priority claims to assets and
dividends and special voting rights, could adversely affect the rights of
holders of the common stock and thereby reduce the value of the common
stock. The designation and issuance of preferred stock favorable to current
management or shareholders could make the possible takeover of the
Registrant or the removal of management of the Registrant more difficult
and discourage hostile bids for control of the Registrant which bids might
have provided shareholders with premiums for their shares.
No Current Trading Market for the Registrant's Securities. There is
currently no established public trading market for the securities of the
Registrant. No assurance can be given that an active trading market in the
Registrant's securities will develop or, if developed, that it will be
sustained. The Registrant intends to apply for admission to quotation of its
securities on the NASD OTC Bulletin Board and, if and when qualified, it
intends to apply for admission to quotation on the Nasdaq SmallCap
Market. There can be no assurance that a regular trading market for the
common stock will develop or that, if developed, it will be sustained.
Various factors, such as the Registrant's operating results, changes in laws,
rules or regulations, general market fluctuations, changes in financial
estimates by securities analysts and other factors may have a significant
impact on the market price of the Registrant's securities. The market price
for the securities of public companies often experience wide fluctuations
which are not necessarily related to the operating performance of such
public companies such as high interest rates or impact of overseas markets.
Penny Stock Regulation. Penny stocks generally are equity securities
with a price of less than $5.00 per share other than securities registered on
certain national securities exchanges or quoted on the Nasdaq Stock Market,
provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system. The
Registrant's securities may be subject to "penny stock" rules that impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission relating to the penny
stock market. The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered representative and
current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny
stocks. Consequently, the "penny stock" rules may restrict the ability of
broker-dealers to sell the Registrant's securities.
The foregoing required penny stock restrictions will not apply to the
Registrant's securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the Registrant's
securities will be reached or maintained at such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING
ACCOUNTANT
As a result of the Merger and as of the date thereof, the accountant to
the Registrant is replaced with the accountant for PMI. The financial
statements for the Registrant since inception thereof have not contained any
adverse opinion or disclaimer or were modified as to any uncertainty, audit
scope or accounting principles. The board of directors of the Registrant
subsequent to the Merger approved the auditors of PMI, Gilbert &
Company, to continue as auditors of the Registrant.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE
OFFICERS
Pursuant to the Agreement, upon effectiveness of the Merger, James M.
Cassidy resigned as the sole director and officer of the Registrant and the
officers and directors of PMI were designated to serve in their same
capacities for the Registrant until the next annual meeting of stockholders
and until their respective successors are elected and qualified or until their
prior resignation or termination.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith. The Registrant shall file
the financial statements by amendment hereto not later than 60 days after the
date that this initial report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO
REGULATION S
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRIME COMPANIES, INC.
By /s/ Irving Pfeffer
Chief Executive Officer
Director
Date: January 14, 1998
Certificate of Merger
of
Prime Management, Inc.
with and into
Corcoran Technologies Corporation
Pursuant to Section 252 of the General
Corporation Law of the State of Delaware
CORCORAN TECHNOLOGIES CORPORATION, a Delaware
corporation, hereby certifies as follows:
FIRST: The names and jurisdictions of the constituent corporations
are Corcoran Technologies Corporation, a Delaware corporation, and Prime
Management, Inc., a California corporation.
SECOND: An Agreement and Plan of Merger (the "Merger
Agreement") has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with
Section 252 of the General Corporation Law of the State of Delaware and
Chapter 11 of the General Corporation Law of the State of California.
THIRD: The Merger Agreement, dated December 23, 1997, and
the amendments to the Certificate of Incorporation of the surviving
corporation have been approved by action by unanimous consent of the
Board of Directors on December 23, 1997 and by written consent without a
meeting of a majority of the shareholders dated December 23, 1997.
FOURTH: The surviving corporation is "Corcoran Technologies
Corporation" (the "Surviving Corporation").
FIFTH: The Certificate of Incorporation of Corcoran Technologies
Corporation in effect as of the date and time of filing of this Certificate of
Merger shall be the Certificate of Incorporation of the Surviving
Corporation and pursuant to the Delaware General Corporation Law shall
be amended by the changes set forth in the Merger Agreement to include
the change of its corporate name as follows:
Article First of the Certificate of Incorporation of
CORCORAN TECHNOLOGIES CORPORATION shall be
deleted and replaced with the following:
"The Name of the Corporation is Prime Companies, Inc."
SIXTH: An executed copy of the Merger Agreement is on file at
the principal place of business of the Surviving Corporation at 155
Montgomery Street, Suite 406, San Francisco, California 94104, and a copy
of the Merger Agreement will be furnished by the Surviving Corporation,
on request and without cost, to any stockholder of either constituent
corporation.
SEVENTH: The authorized capital stock of Prime Management,
Inc., a California corporation, which is not the surviving corporation, is
10,000,000 shares of common stock, $.001 par value per share, of which
921,041 shares have been issued and are outstanding, and no preferred
stock.
EIGHTH: This Certificate of Merger shall be effective immediately
upon its filing with the Secretary of State of the State of Delaware.
<PAGE>
Signature Page to Certificate of Merger
between Corcoran Technologies Corporation and
Prime Management, Inc.
IN WITNESS WHEREOF, Corcoran Technologies Corporation has
caused this Certificate of Merger to be executed in its corporate name by its
President and attested to by its Secretary on the 23rd day of December,
1997.
CORCORAN TECHNOLOGIES
CORPORATION
By:/s/James M. Cassidy
Name: James M. Cassidy
Title: President
ATTEST:
By: /s/James M. Cassidy
Name: James M. Cassidy
Title: Secretary
